Breakaway Loses More Executive Staff - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Breakaway Loses More Executive Staff

The IT solutions company once had a unique spot in the services market, but depended too much on dot-com clients.

Embattled E-services provider Breakaway Solutions Inc. has decided it's had enough of trying to bail out its sinking ship with a paper cup. The Aug. 28 resignation of Breakaway president and CEO William Loftus and senior VP of professional services John Loftus are the latest in a string of stumbling blocks that have led the company to announce it is pursuing a merger or acquisition.

Breakaway Solutions held a unique place in the IT services market for a while because it was a midsize company that tried to provide consulting, outsourcing, and ongoing support services, says Joel Yaffe, a senior Giga industry analyst. Breakaway's plan was to provide the operational services that consulting firms couldn't, and provide outsourcing for midsize companies more easily than IBM Global Services or EDS could.

"But, like a lot of companies in this space, they depended too much on dot-com clients. And when larger service providers like IBM turned their attention to the midmarket, service providers like Breakaway and Xuma Inc. got pushed aside," Yaffe says.

Breakaway's chances for a successful merger or acquisition dwindle as the company is forced to jump each successive business hurdle. In June, the Nasdaq National Market delisted Breakaway as the service provider's stock fell from a 52-week high of more than $41 per share to less than one dollar per share. In April, news of a $33 million round of financing from a group of investors led by SCP Private Equity Partners and Internet Capital Group was offset by about 200 layoffs and several office closings. Another shakeup took place in April when William Loftus took over as president and CEO, replacing Breakaway founder Gordon Brooks.

Breakaway's appeal as a merger or acquisition target is fading, Yaffe says, as the service provider loses not only money but also the talent required to deliver on its full-service provider strategy.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Reflections on Tech in 2019
James M. Connolly, Editorial Director, InformationWeek and Network Computing,  12/9/2019
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Register for InformationWeek Newsletters
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll